The new child benefit system is "frustrating" for a million parents
who will lose more than £1,000 a year in payments, the chairman of the
Conservative Party has admitted.

Grant Shapps said he "feels the pain" of parents earning more than £60,000 a year, who must declare they are ineligible for child benefit or go through the tax self-assessment system.

The senior Conservative MP conceded the new system will put an extra burden on parents, after he filled in the forms himself. However, he called on people to remember they are "in this together".

The Coalition is under pressure over its move to stop high earners claiming child benefit payments, which are worth £1,055 annually for the eldest child and £696 for further children.

Under the new system, any family where one earner takes home more than £60,000 a year will lose all of their benefit. Once the household's highest earner takes home more than £50,000 a year, they begin to lose part of the benefit for every extra pound they earn.

The Government has been accused of presiding over "chaos" in the system, as only around 200,000 families have come forward to opt out of receiving their benefit.

As many as 800,000 people will continue to receive the money and have to repay it in tax through the complex self-assessment process.

Many are still unaware they are affected, but under the rules, they are meant to complete tax returns for the year ending this April — or face fines running into hundreds of pounds a year.

Mr Shapps denied the system is a "shambles" but suggested it is not easy for people.

"I speak as one of the 15 per cent of parents who is losing child benefit," he told the BBC's World at One. "I have three children I've filled in the form. I totally understand and get how frustrating these things are.

"The truth is, though, nobody wants to lose money, nobody wants to lose the income. The reality is if you are losing child benefit you are, by de facto, in a somewhat better position than other people which is why this policy commands overall support from the public.

"I won't quite go as far as sharing the conversation between me and my wife. I feel the pain. But the truth is we all need to be in this together."

Critics also claim the system is not fair because a family with one parent earning more than £60,000 a year will lose its benefit, while a family with two parents earning more than £50,000 will keep it.

However, David Cameron today insisted the current system is the fairest method of taking away child benefit from high earners.

“The only way of addressing that would be to have a means-testing system that means-tested every family in the country and I don’t want to introduce that sort of complexity into our system," he said.

"That’s why we have opted for the relatively straightforward approach of saying ‘if you or your partner or husband or wife earns over £60,000, you shouldn’t be getting child benefit anymore and so you lose the child benefit’."

Speaking on the BBC's Andrew Marr Show, he said everyone in society needs to make a "fair contribution" to paying down Britain's debts.

“You cannot deal with the deficit just by taking more in tax from the very richest, although we are. Nor can you deal with the deficit just by combating welfare fraud and evasion and excessive welfare at the bottom," he said.

"You need to make sure that everyone is making their contribution. So taking away child benefit from people earning over £60,000 – that’s only the top 15 per cent of the country; I’m not saying those people are rich, but I think it’s right that they make a contribution.

“This will raise £2 billion a year. Now, if we don’t raise that £2 billion from that group of people -the better-off 15 per cent of the country - we'd have to find somewhere else to take it from.”

George Osborne, the Chancellor, also defended the changes over the weekend, saying he and his wife have already opted out of receiving their child benefit in advance.

"This week my family will not receive the child benefit we’ve been getting every week since our children were born," he wrote in the Mail on Sunday. "Any household where at least one member is earning more than £60,000 will be in a similar position.

"It’s not an easy decision we’ve taken as a Government – these days, there aren’t any easy decisions. I know many of these families will not consider themselves rich. They are working hard to pay the bills and get on. But it’s a right and fair decision."

Lin Homer, the chief executive of HMRC, also said it would not be too difficult for hundreds of thousands of people to complete self-assessment forms.

"We have been improving self assessment over the last few years and a great many use it online, it’s quick, it’s simple," she said. "The most people will have to do is to return the child benefit that they have received."